Bitcoin's bull cycle is 'far from over' thanks to halving - CryptoQuant Research
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BTC
$66,743.51
+8.63%
Over the past 48 hours, the price of Bitcoin (BTC) fell 13% from a new all-time high of $73,835 and briefly traded around $60,000. The correction was driven by overheated market conditions that analysts dubbed a "pre-halving pullback" ahead of the Bitcoin halving event, which is roughly 30 days away.
BTC/USD daily chart. Source: TradingView
However, the CryptoQuant report shows that Bitcoin's bull cycle is not over yet, given the relatively low level of investment flows from new investors and price valuation metrics that are still below levels seen at past market tops.
The data analytics company's weekly cryptocurrency report shows that 48% of bitcoin investment comes from short-term holders. According to CryptoQuant analysts, “a bull cycle typically ends with 84-92% of investments” from these new investors.
“The Bitcoin bull cycle is far from over, as evidenced by the relatively low level of new investment flows.”
Bitcoin sales limit is the percentage of OTXO age groups. Source: CryptoQuant
The chart above also shows that this metric has “reached levels similar to mid-2019 (52%), when Bitcoin also experienced a significant correction,” which is something short-term traders should pay attention to.
The CryptoQuant report also showed that valuation metrics are still below levels corresponding to past market highs.
“The CryptoQuant P&L Index is still outside the top zone of the market (red area) and above the index's annual moving average.”
Bitcoin: CryptoQuant Profit and Loss Index (PnL). Source: CryptoQuant
Related: BTC Price Drop Reaches 17.5% as Bitcoin ETF Net Outflows Nearly $500 Million Over the Week
The PnL CryptoQuant Index consists of three online indicators that show the profitability of Bitcoin. The index previously indicated that the cryptocurrency market would enter a bull cycle in 2024. However, the chart above shows that current levels are slightly lower than those seen when the market peaked during the 2013, 2017 and 2021 bull runs.
Only a month left until the Bitcoin halving
Apart from the indicators discussed above, the upcoming Bitcoin halving event is a major factor that is expected to support the price of BTC, ushering in a parabolic uptrend.
According to CoinMarketCap's halving countdown, Bitcoin's next halving event is less than 31 days away.
Bitcoin Halving Countdown. Source: CoinMarketcap
There are approximately 4450 blocks left. The estimated remaining time will result in the fourth Bitcoin halving occurring on April 20, with miners' block rewards decreasing by 50% from 6.25 BTC to 3.125 BTC.
Historically, Bitcoin's supply halving has been associated with an increase in the price of BTC. Halvings have always preceded significant bull runs in the Bitcoin market.
Standard Chartered Bank made a bold prediction, raising its BTC price forecast from $100,000 to $150,000 in 2024.
In an investment note to clients on Monday, March 18, Standard Chartered Bank analysts wrote:
“In 2024, with sharper-than-expected year-to-date price increases, we now see the potential for the price to reach $150,000 by year end, up from our previous estimate of $100,000.”
The bank also predicts that the BTC price will reach a cycle top of $250,000 in 2025 and then stabilize at around $200,000.
While the bank's analysis is not entirely based on the halving event, it is based on the impressive performance of spot Bitcoin ETFs since they began trading on January 11, as well as the different dynamics they bring to the market in this halving cycle.